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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (24009)	1/4/2005 9:16:52 AM
From: russwinter	Read Replies (2) \| Respond to of 110194

<Shortterm jiggles aside, the next big move will be up -- at least against the Euro.> There are two variables to watch, and I no longer feel it will be a "big USD move up", too much fire power is being dissipated, and I see the real medicine (meaningfully higher interest rates) as having increasingly low odds now. That is making the anti-USD trade much less risky than it was several months ago, although the volatility (including upspikes) has increased. Valuation risk is virtually nonexistent in the quality juniors (gold call options) now, they are gifts.: 1. The USD printing presses I've been alluding too. If the Wizards are withdrawing some of the extremely toxic doses of heroin injections seen in the Sept to Dec. 8th period, that will give the USD a little support, and there's evidence that's what's happening in the very short term now. However I would expect the USD to start swooning again, and especially gold (more so than the Euro) to rapidly recover the moment they do a large permanent, bought outright or other printing press exercise, and it's impossible not too given the massive debt monetization needs. So ultimately they can't help themselves, it's like asking pedophiles to leave children alone, and as long as they (Wizards/pedophiles)are loose on the world, it means more trouble for the USD. 2. The spec/hedge fund positions. They came out of a good chunk of their oversized long FX/precious metals positions on the first feeble USD bounces. Gold seemed to have a bigger hole to cut through than the currencies, but yesterday was significant because real investors (as opposed to leveraged futures types) showed up and snapped up over 14 tonnes of physical in the ETF. That's a significant bullish event in my book. Secondly this second downdraft has no doubt cleaned out more spec/fund longs, making it "safer". My sense is that there may possibly although unlikely be enough flush left to hit the 200 MA average around 412, jessel.100megsfree3.com but I don't want to get too cute about this, so I'll just keeping scaling in. A drop that low would be very fleeting anyway IMO, and an historic back up the truck opportunity. The juniors I use now seem to be priced for about $325 POG, and are doing what I call "vacuum" trading from lack of interest rather than liquidation. I consider vacuum trading to be very bullish.